Business North - The Daily Briefing - Business Newspaper OnlineMinnesota Power takes next step for transmission line

4/17/2014

PHOTO: ALLETE Chairman, President and CEO Al Hodnik

Minnesota Power applied to state and federal regulators this week for permits to build the 500-kilovolt Great Northern Transmission Line from the Minnesota-Manitoba border to an Iron Range electric substation on the Iron Range.

The utility, a division of ALLETE Inc., filed a route permit application with the Minnesota Public Utilities Commission (MPUC) and also applied for a presidential permit from the U.S. Department of Energy for the international interconnection at the U.S.-Canadian border.

The Great Northern Transmission Line will provide Minnesota Power customers and the Upper Midwest emission-free hydroelectricity generated by Manitoba Hydro. The project advances Minnesota Power’s EnergyForward strategy of increasing its generation diversity and expanding its renewable energy portfolio, the company said in a news release.

“The Great Northern Transmission Line further transforms the energy landscape by reducing carbon emissions, strengthening the regional energy grid, adding more renewable power and supporting new industrial growth on Minnesota’s Iron Range,” said ALLETE Chairman, President and CEO Al Hodnik. “This international project is the right project at the right time to promote a more balanced energy future.”

The new transmission line will facilitate the delivery of at least 750 megawatts (MW) of energy into the U.S. beginning in 2020. Minnesota Power, which will have majority ownership of the project, will use the Great Northern Transmission Line to deliver 250 MW from Manitoba Hydro through a power purchase agreement approved by the MPUC. The two utilities are also finalizing an agreement outlining how Minnesota Power will purchase additional energy and substantially expand its energy storage opportunities.

“The Great Northern Line enhances a unique synergy involving hydropower and wind,” said Minnesota Power Chief Operating Officer Brad Oachs. “The new transmission capacity more readily allows the Manitoba Hydro system to store intermittent wind generation during times when energy markets don’t need it. This is important to Minnesota Power as we expand our Bison wind project to 500 MW in North Dakota by the end of this year.”

Minnesota Power estimates total project cost in the U.S., including substation work, between $500 million and $650 million, depending upon the final approved route.

Two alternate routes are listed in the applications. Both are approximately 220 miles in length and, where feasible, follow existing transmission line rights-of-way.

Construction is expected to begin by 2016 and be completed by 2020. A University of Minnesota-Duluth economic study estimated the project will create 213 construction jobs and 73 additional indirect jobs.

The Great Northern Transmission Line will generate approximately $28 million annually in state and local taxes, according to the study. About $875 million of direct and indirect spending on goods and services will be needed to support construction activities, researchers said.